All Forum Posts by: Tod R.

Not so much a warm and fuzzy, more like anger...Has the IRS audited you on the payment for services of your children? How do you prove that you gave a kid your computer? Bill of Sale, copies of lease payments? Are they your children?

I tried in the Loan Forum, but no takers. So I thought I would try here.

My company owns about 2.5 acres in the heart of an office/warehouse area. It's just off a major intersection, about a mile from the Hwy 190 toll road. A great location. It's a second phase of 35K sq ft office flex bldg we built and sold a couple of years ago. It's probably worth about $500K now, currently free and clear of any debt. We're looking to borrow about 60% against it. The borrower/guarantor has huge net worth compared to the property's value, some cash, most in real estate developments. Banks just don't want anything to do with land right now. So, I thought I would run this by BP for any suggestions. We are not opposed to selling it below market.

Thanks,

Tod

My company owns about 2.5 acres in the heart of an office/warehouse area. It's just off a major intersection, about a mile from the Hwy 190 toll road. A great location. It's a second phase of 35K sq ft office flex bldg we built and sold a couple of years ago. It's probably worth about $500K now, currently free and clear of any debt. We're looking to borrow about 60% against it. The borrower/guarantor has huge net worth compared to the property's value, some cash, most in real estate developments. Banks just don't want anything to do with land right now. So, I thought I would run this by BP for any suggestions. We are not opposed to selling it below market.

Thanks,

Tod

Hopefully, this isn't a worn out question, but of the responses (i.e., 3%, 5%, 20%) what do you hope to actually close on? One? What would the total mailings be in an "average" mailing?

I heard there's a fella in Chicago that's a pretty sharp real estate guy. His name is Tony Reznik, ever heard of him?

Sorry about that. I know, I know. Texas has it's share of them too.

Welcome to the site. If you stick with it you'll find lots of information as well as people who are more than willing to help, for free!

There are great opportunities currently available and coming...Unless it turns out you're buying at the top of the down market! Obviously no one knows for sure where our economy is going. Therefore, a prudent strategy would be to borrow the "dollar cost averaging" concept from the financial investment industry. Purchase methodically over a period of time. This would help reduce any overpayment of property you end up making in your overall portfolio. As a wise Arkansas oil man (who came into a large metropolitan city in TX and bought a professional football team simultaneously firing the long-time beloved head coach like a government takeover in a third world latin country) said, you need to "keep (some of) your powder dry" for the next opportunity that presents itself.

Jon, what's your thought on the down payment? I'm just not familiar with any 3.5% down loans.

Way to go Jeff. I think you are on the right track, with the duplex idea. You just need to keep working towards getting it done. Two issues that I see. I would imagine that the best you could do is an 80% LTV on the purchase. If you bought for $170K, then your down payment $34K. Also, a lender will probably not give you credit for your rental income until you had a signed lease. Even then, you'll be lucky to get 75% credit for it.

There's nothing like good 'ol entertaining, fun information to brighten your day...I just think with the huge amount of additional goverment debt, interest rates will continue to rise. I can't see energy costs going anywhere but up, which will force prices of goods up. If demand for products continue to go down, but costs to produce go up, manufacturers will go out of business, reducing supply. Sounds like stagflation to me! Am I wrong America?

Randal, don't be intimidated about the process. Make an offer, get a prequal letter for the lender, it's fairly easy. Be sure to have some option period in your contract in case you need to back out. This gives you time to do your due diligence. So what if you let it go? If you understand the rules that you have to work with, then you can make a good deal, regardless of the state.